8 charged in $50M fraud case involving drug abuse program

Eight Southlanders are facing charges for alleged involvement in a fraud scheme in which more than $45 million in bogus bills were submitted to a state program for alcohol and drug treatment services for students that often did not need treatment, federal prosecutors said Wednesday.

Six of the defendants who worked at Long Beach-based Atlantic Health Services — formerly known as Atlantic Recovery Services, or ARS — were arrested Wednesday by federal authorities, according to the U.S. Attorney’s Office.

A 40-count indictment returned by a Los Angeles federal grand jury last week and unsealed today alleges that the now-defunct ARS received more than $45 million from California’s Drug Medi-Cal program after phony claims for group and individual substance counseling services were submitted.

“The defendants named in the indictment are accused of exploiting a program that was set up to help a particularly vulnerable population — young people who are confronting drug and alcohol abuse,” said U.S. Attorney Eileen M. Decker.

“According to the indictment, ARS and its employees engaged in a long- running fraud scheme to steal tens of millions of dollars from a program with limited resources that was designed to help underprivileged youth in recovery,” she said. “In the process, the defendants and ARS branded many innocent young people as substance abusers and addicts in order to boost enrollment numbers and billings.”

The defendants named in the indictment are:

• Lori Renee Miller, 54, of Lakewood, program manager at ARS who supervised substance abuse recovery managers and counselors;
• Nguyet Galaz, 41, of Montclair, who oversaw services provided at 11 schools in Los Angeles County;
• Angela Frances Micklo, 56, of Palmdale, who managed counselors at nine schools in Los Angeles County, including several in the Antelope Valley;
• Maribel Navarro, 48, of Pico Rivera, who managed counselors at 10 schools in Los Angeles County;
• Carrenda Jeffery, 64, of mid-city Los Angeles, who managed counselors at three schools;
• LaLonnie Egans, 57, of Bellflower, who managed counselors at three schools;
•  Tina Lynn St. Julian, 51, of Compton, who worked as a counselor at two schools; and
• Shyrie Womack, 33, Egans’ daughter, also of Bellflower, who worked as a counselor at three schools.

Galaz and Micklo are expected to surrender in the coming weeks, prosecutors said.

ARS submitted bogus claims for payment to the Drug Medi-Cal program for a decade, according to the indictment.

The company shut down in April 2013, when California suspended payments to the company.

According to the indictment, the claims submitted to the Drug Medi-Cal program were false partly because ARS billed for services provided to students who did not have substance abuse disorders or addictions and therefore did not qualify to receive the services.

A dozen defendants previously pleaded guilty to fraud charges stemming from the ARS scheme and are awaiting sentencing, according to the U.S. Attorney’s Office.

Each of the eight defendants named in the latest indictment potentially faces decades in federal prison if convicted, prosecutors said.

— City News Service